Australian Home Buyers Preferences And Their Effects

18.05.16 | Marc Barlow | News

There has been a lot of talk in the Australian media regarding home prices and affordability in the Australian real estate market.

There are many perspectives which can be taken in regard to these very important issues and it can be a valuable exercise for both buyers and investors to take a step back and to look at the bigger picture at play.

One area that can be looked at is the behaviour of home buyers and their actual needs and requirements for housing, and the financial outcomes that can results from the purchases that are made.

All humans require shelter of some form and would also like to reside within a home of our own, but are the homes that Australians desire and purchase actually suitable for their own purposes?

Australian Home Buying Behaviour And Needs

Some interesting conclusions can be drawn from the 2013-2014 financial year Housing and Occupancy Costs report which was released by the Australian Bureau of Statistics (ABS) in 2015.

Part of the ABS’s report that focuses on Australian’s household utilisation by household type showed that 85.6% of homes which were owner occupied contained at least one more bedroom than what was actually required for everyday living purposes, and that 60.9% of homes that were rented out also featured more bedrooms than their tenants required.

Conversely, of the surveyed households that were owner occupied 12.6% replied that their homes had enough bedrooms for their own purposes, while approximately one third of homes which were being rented out replied that they had a sufficient amount of rooms in their homes.

The Effects Of Home Buyers Preferences

A conclusion that can be drawn from the ABS’s report is that Australian home buyers are purchasing properties larger than what they actually need, which in turn can lead to buying in at higher prices and the undertaking of larger mortgages and increased amounts of interest to be paid over the short, medium and long term.

Additionally, families seeking extra space are often required to purchase in outer suburbs where new homes builds are taking place and larger properties are more affordable, whilst singles and couples who are making purchases are concentrated in inner-city areas due to new apartment and unit builds being much more prevalent.

Realistic Needs And Improved Outcomes

As home housing affordability continues to be problematic home buyers are advised to determine what their actual needs really are and whether their desires and expectations are realistic and are able to deliver appropriate and improved outcomes for all the parties that are involved.

While an extra bedroom might be nice in theory it will most likely cost the home buyer in terms of geographic location, the purchase price paid and the ongoing associated interest payments that are attached, whilst a more realistic view may see a home buyer be able to improve their overall position in all of these affected areas.